PGR - Earnings call transcript Q1 2021 | The Progressive Corporation

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Operator

Welcome to The Progressive Corporation’s First Quarter Investor Event. The company will now make detailed comments related to quarterly results in addition to those provided in its annual reports on Form 10-Q and the letter to shareholders, which has been posted to the company's website.

Although CEO, Tricia Griffith, will make a brief statement. The company will then use the remainder of the event to respond to questions. Acting as moderator for the event will be Progressive's Director of Investor Relations, Doug Constantine. will call I to time, this turn over the Mr. At Constantine.

Doug Constantine

Tamara, and you, good Thank morning.

may Investor The typically question-and-answer can will by Relations on quarterly our team. today's our Although events Questions comments introductory members dial-in portion XX scheduled investors.progressive.com/events. dial-in be by our telephone of event the leadership for a and found include asked of business, with at use only we a instructions be instead CEO minutes participants. for session specific presentation the our

always, in today's These results and to could management's event. and As discussions include that this forward-looking during events subject statements current to event statements. differ are many may uncertainties actual on risks materially and are from based cause discussed expectations those

concerning the in and supplemented XXXX, and Form quarter information related face. businesses, December those on report Safe year to for available of Harbor and statements where XX, will risk for discussions statements XXXX, annual report first the our is XX-K XX-Q uncertainties other challenges of affecting our the forward-looking the by find factors of discussions you we our ended risks Additional

some our Tricia the our from first Griffith, to Tricia? comments. conference line, will call going Before question make introductory CEO,

Tricia Griffith

Welcome Thanks, appreciate you quarter Doug. joining Good to conference morning. us. first Progressive’s call. We

toll quarter we emotional and fourth the of reflect the took call, and pandemic our unrest. on During the opportunity XXXX to social

look us, brings Now return with with normalcy. and a the of we optimism forward hope to that first behind XXXX vaccine the of the the rollout quarter

to to next which to in a for deliver react comes fantastic the whatever Our face continue people results. us of willingness resilience attitude, are the allow positive and showing to tremendous hardships

the the net pandemic year-over-year some is that company-wide where XX And assets. to to also XX% pandemic that in point ratio like added Auto we of to comparative of XX%. force continues reported first points written million the their and is the Progressive XX.X growth to XX first that I growth of of the time have I'm on exception commercial premiums healthy with out Property, pass address the digit lines policies special the during All the most previous most and our year's quarter Policies combined next X in combined at reported we were months. of catastrophic people report personal where of this first results. many double million effects loss million Personal be was several profitable PIFs important I’d quarter, excited weather results that to milestones force. our that effect PIFs, This saw take the lines for PIFs, strong of the will XX.X. be a growth our ratio. was we couldn't XXXX, want since quarter. some auto, the month to line We second time lines we in in so to March and proud protect trust special

March, our good to So, we give the that results. comparisons. XXXX some remind our that affect actions XXXX into feels in further like a of to insight everyone could it year-over-year time And took

of metrics affected our into pandemic be PIF year's Lines. denominator app new in the and onset that in which two Personal reported growth stimulus in the app growth growth of new we Even stalled. the the quarter, effects package of Lines that includes the robust. effect of business Commercial growth of summer by well the was that This denominator a continued pandemic shopping, said reflects the We've virtually pandemic Last growth new the is This often XX% is XX% year-over-year considering growth. items: The XXXX. since measure nominally great affected example, the preferred is to why dependent. by only and

always released were shopping. which mid-April, not new restarted In first So business checks, the stimulus XXXX, of wave negatively.

shopping impact will many including XX%, uptick financial second credits the expense received believe we expect our our ratio. Program, support and April our increased expense Relief last XXXX April have but on At assistance took metrics, our quarter, provided year in May will also in customers last affect monthly actions the customers, customers, our growth. year-over-year, our to personal of including premium substantial our end of year, XXXX, ratio. We Also which Apron new starting we an to key of of auto business which

as temporarily In leniency. expense, addition, in driven In Both, contributed noted bad which decrease denominator and release. miles and payment driven also billing TNC enforced effect which of March March initiated Commercial remainder in decrease affected as XXXX, our over saw written over part policy the driven our estimated the Lines, future and leniency, the to premiums we Miles be XXXX. were billing the increased so counts slowly our those recovered March the to retention. course the increase sudden in on debt Lines, of a in dramatic retention will Program, XXXX, but business significant our XXXX, Relief by anticipate and miles in net increased metrics, of premiums we Apron of Commercial positive of

losses. cat catastrophic is quarter another suffered for be be In Our in normally rocked first appear and business event. late Texas the property storms losses. which the property to a Oklahoma losses, results significant large in Further relatively occurred April that hail to continue quiet quarter, by

also everyone the under a assess feedback helpful before loss of is late on the had heard comments the threshold it we improve. positive desire One the to like to receive release, opportunity to we April take single organization will early to pandemic. million at scheduled the for May commissioned We'll of encouraging during a quarterly with to which to ultimate in One I'd calls format we can call of We around our ways least starting XX. August this that the where and to currently year. we the study events of to perception to was opportunity and the It business. this which each participated storm I'll clear aspects at too in April to year, the see remind call, senior return exposure, return from thank program. more highlight beginning lines. take the the we have excess moment was who all present details we received various we format reinsurance it's two a and everyone on occurrence managers that commercial loud will intend retention While $XX our on was our from an

with rest the of the optimism. I'm filled a Looking sense XXXX, of into forward

far resilience and is have that think, in pride to ready pandemic results deliver the first confidence the our likely and plans have of we And coming you. strength quarters. the have While business, great the Thank question I of continue many us, from our we in will Tamara. people of the over take I'm the still challenges place ahead in to

Operator

Thank is you. go from Greenspan Fargo. Your Instructions] Elyse Please Wells with ahead. response first [Operator

Elyse Greenspan

on. setting quarter. XX-Q Hi, thanks. but frequency more except Good coverages the on going knowing is what morning. it frequency the the My why in interested first collision all question was color on the just was I first was disclosure down, was on in

Tricia Griffith

in one rates at right due now. results. different PD CWP assessing other collision. We Yes, has believe it and in in we to gap part similar look When at actually competitor and our PD we are is that least being the collision,

is So Elyse, similar right a is Claims our having a Traicoff reporting in Gary different. now, The group and rate CDP little we're deeper. dig group Control bit

to trying exactly we're is. discern So, what that

Elyse Greenspan

strong Okay. app And the and new in pretty raft you growth of some as on there That's also strong helpful. growth saw well. you then saw renewal terms on

it by seeing And increase on you the So, is, is question mapped are within my business I penalty renewals being the your guess as new also is business that well? significant. is

Tricia Griffith

it we're whenever spend we in sliding going you terms both think obviously which XX% advertising for business, saw acquire increase direct in of commission. I the to new more

in The proud bit So, on our I you know one, don't John, is our renewal, penalty the weigh little and can that. service we're rates. of that extraordinary,

gains say due there that what a likely et are the in I non-cancellation, we has that of big to happened penalty. some So, terms cetera. But a during wouldn't know retention pandemic is of

John Sauerland

a to of The stable, We spending when only lot a and are be function is business terms recognize policies the and always a XX% you're certainly spend. businesses also but it more And as agree. terms efficient. But we advertising is in believe penalty, business mix our would of it's business renewal growth mature of we the are. the as premium, are your even that, I that growing when to in dominator. we of fairly a function like new reiterate new to

Elyse Greenspan

sure said were the claims is I start? my on when first And had just just then payments quick want question make question. CWP, discussing you I once to with you When collision on to follow-up that

Tricia Griffith

It's acronyms that I'm sorry Elyse here. claims of about a without we payments. have lot

come that and claims them see we because we no So, in an close exposure. longer then

Elyse Greenspan

you. Thank thanks. Okay. Extremely

John Sauerland

trend going going this been collision I down. damage up. was to just property been actually predates for and the close pandemic for It's has without clarify going has payments for

So number. next frequency that obviously Tamara affects the total question.

Operator

with next please Peters Your response go is ahead. Greg Raymond from James,

Greg Peters

question auto some do carriers commissions a in the agents. property underwriting losses, on and This we're Give regional of business, XXXX? commission pay hearing I history pressure business. on rates. competitors that happened to also rates. the your talk rates? synopsis in of commission have happen first been of But know them will commission and be with slammed on the on Good then lightened the to what has morning. view to up also My have their high is ratios Can a the your lot about us combined going apply you and think you us

Tricia Griffith

look the are right, a comes we then Platinum home commission right bundling thousand because are get the depending in, it's if of agents aggregate they to try different bundled, XX.X. obviously so type have And our at higher things those we Robinson's of and customers. auto mean several history on to I in around customer the XX, commission, that

XX.X%. some add Do Board, and for across you in preferred agents customers want the a agents. it's bonuses the specific to we try we their It's so, aggregate there keep believe group XX%, Again, going that And commission is, be not to do with might around we of the are And John? also to programs you have anything on less. if be short term, loss performance. bring depending

John Sauerland

Tricia in that siting XX.X% run The our generally where is auto is business. we

prices, But overarching other objective side, is to ensure expense commission On the a we competitive as or have the competitive have competitive as non-acquisition when higher costs to commissions we we call property rate. costs. well ratio we have that means here have

thrive. combination those and come which of condition of expense both terms think And it's our go-to-market agents of having in will in into so ratio, the a really, aggregate competitive, play a obviously we

from movement downward been competitors. has there So

You right. are

positives commissions I think some are degree, like really some they tease were competitors more but couldn't any we're these That's we seen impact because have perhaps, our that to specific out of where we that. previously, than to going. days

Greg Peters

you like. is very time in is leader the which does for more the Thank next question focus on of this in Robinson's. property will that on for to wondering property answer. its stand business business out loss point the the it results, drive because underwriting retention view My unprogressive I'm if at a

there And margins willing XX but to, to to ratio have alternatively, because think, business combined objective target corporate be sacrifice color that to up so, maybe property. or you're retention it's also it's drive down order eventually some lower is this helpful. do get your in I would overarching you your

Tricia Griffith

one not our values. Yes. do No, Profit be is a of we to loss leader. core want

have very XX. our up We rolls specific for our margin you property that, as stated, target to a business

fairly in business riddled been a with newer lot catastrophes. segmentation. of us terms just a have for It's We of also

we'll to if quick you homes. how really over in in improved the continued our a do and segmentation, years, we at auto, anticipate rate, improve look at So, that we've much

hill states customers roof. we lot. new the they working a some relatively we R&D prone our that them we've models, have we've because restrictions have which product right could higher have to deductibles really causes hail and So, in be wind that seen product for models, on for buy And group your have also

done have increases. rate we lot a addition, In of

So, in another close in took XX.X in XXXX two. QX, to expected X.X and we we another X.X about quarter points, have

So, get that continue to to raise goal. rates we ultimately to

gotten And is wrote that and high my of the percentage Now, with, know in letter, on side. both is I we having what and fact side agency autos. customer what on the bundled those have not getting of without a are we're not happy gotten, we have a we we most agency a likely product, property direct would would it the

make to want we But period. target those. our margins Board want we So, across the

re-insurance catastrophes. working also to have with protect been property – with continue have, So with to And we're goal. course, that's thrilled the We industry, and we're the results have the re-insurance, get rocked towards. heavily ultimate to But downside. what we're of really not to chip we to away along side going on our those

Greg Peters

the for answer. you Thank

Tricia Griffith

you, Thank Greg.

Operator

you. Thank

Your next Please response Stanley. go is from Morgan ahead. Michael with Phillips

MichaelPhillips

Thanks. Thank everybody. morning, you. Good

First opportunities help and and you the And segmentation to, in outside maybe period on claims. Snapshot I'm areas price increasing for of data of outside and any if getting for time and I – competitors any curious about guess, seen that Telematics you from question other besides, Telematics related, guess, talk then is I of We've Snapshot And instance, there from about pricing. are could to collect segmentation. value that you some currently claims. excuse me talk Snapshot extend

Tricia Griffith

testing into Snapshot, for time. We've claims and some loss, and the fraud, Michael. things understanding been looking other of quite Thanks facts

have talked accustomed we've to also have and services on it behavior, other do on have things is gas think that. continuous currently more we'll we have likelihood for information, the our terms of a Would important in like but tows, Telematics. often we And can the customers we've grown necessary customers to with with that we that But stations added too We've understanding should like XXX,XXX claims help help, step have changing use loss. in things an while. that. of that a not I that And had been next come working driving for and think to access on only about they monitoring?

to of we've driven list as items and vehicle Relief. Apron our is to the during that on that try talked other the work-from-home understand obviously, work-from-home, well big how as some not our So as cetera, Currently, well. et was pandemic, relates miles versus the effort about to

big driving terms talked the to we'll continue lesser so data who a we believe I've that of prove decades, for them to ability So, are about a hall give the outside, mean of and results on And lot for we've a been people through expense on shorter commercial happy commercial But couple of do successful. very truckers. to both is do and monitoring that side they in bandwagon the this give actually are a on personal continued on auto very area. that's smart a profitable I those the all in period to really the the less rate. so, we with our auto agenda program invest and UBI because things our

John Sauerland

thing, know The evolving video. is is cam we call it that other don't dash not, I if Telematics or

which shows the can those and that those in the space commercial claims the staged frequently in if helpful of quickly. the have because it the especially So higher video have some resolving you because space, in very devices in the claims limits. are a clearly are in targeted one same you it extremely if commercial And video, of be limits vehicles resolves

So, claims well, for profitability as cam evolving rating Tricia and evolving including for commercial side, personal certainly video. Telematics for as mentioned, a dash and obviously benefit, is

MichaelPhillips

great. Okay, Thank guys. you,

is weekend they you Second to look from guess to the you in with Telematics said, start kudos those your some they friends do pricing. more. in and got Omaha this we are lead on But and – at have if going I question

narrow examples, Mass, from significant market pretty terms limited, you lead some New bans with over combine could, competitor these and possibly that of of gains. all, states has gap that that about that think the Telematics score would use we use if credit small in as look if and I share been of states, at So, if not the we they're where aren't York is

two combine start shifts credit towards up. guess credit, away you other Telematics them and if Telematics? you more pick dynamic we start I may may competitive of fade shift to from use things their away So, in they as market and score How states those states about and that think and then do between in to to start

Tricia Griffith

Yes, the question. I'll use great G-word.

the it it formidable because GEICO for us Berkshire we a talked competitor. customers. competition better liked did, makes lot yes, So And are and a about they instead

on we're years is Here now, believe we rate think competitors for as had edge And We've different of lot to not we lot insurance and an usage-based risk a many Insurance, about going being a them, lot one a to scores are of segmentation. our how stop. has them, one to of many variables. variables. do credit other of being but there many,

help really to rate all and consumers regulators. rates competitive. which with We to losses, to risk, We they believe they're the for is to keep will correlated important match ultimate the comply

going not to surprised on are more that. I'm that spend they So, money

also We the the auto Snapshot auto and many, our spending data many more on on continuation of billion of will miles money be side. side both commercial

now now we said we years And brands. great. might have the we not ago, I head-to-head was it think So, competition like But ten this. have

may you the So, may characters. flow, the different you not, very her, network know all like who or and flow we're of is, proud and but you

I going a like good competitive, things So, we always thing. and on that. head-to-head a think all is those been I've

think better. It I makes sure makes laurels. that just on us you it your don't rest

we And really insurance, winning segmentation, need So, variables, and continue we in and broad as react we the to coverage, formula. whatever invest as to our our but think well in other culture those to brand, react usage-based especially all at segmentation Progressive. together and people will are

MichaelPhillips

I Okay. appreciate Thank Tricia. you, it.

Operator

you. Thank

is next ISI. Motemaden from David Your Evercore with response

David Motemaden

book also, differential just the I and the up expectancy of stands PIF is about Tricia the a bit if you just life wondering growth now set And in Robinson sort that of you just your where policy talk today? channel. percent customers? Hi, XX% margin in level differential good spoke up letter maybe could agency morning. in us I'm and direct question and here guess, XX% I had about think about what a channel bundled

Tricia Griffith

Yes, those is added right so which Robinson customers. side. been many increase have we're some We've is really much in was I our goal years what That's platinum total XX%, Robinson. bundled now of the very on book it happy has the agency ago. about higher around to would our right say, agents a than

we Robinson. other gain your was part momentum And that kind what continue in question? of to So, of the

John Sauerland

Profitability.

Tricia Griffith

as the us. are just believe And they retention the we retention different policies more preferred more side, Robinson have, customers, but Yes, on profitable. and dramatically more on with so they side the Profitability. is are not you

us continue stay it give and reason to or on it's decades a that's not. can so for be not or write paper our from important we to to So products to come people decades, that care, why all whether the same to for have able

So and yes, preferred retention so that's margins customer, the and wider the want longer. there we is

John Sauerland

The the auto for basis lifetime target, consistent. clarification, on segments customer across just for is a

have So at obviously been pandemic work-from-home times. our ability loss the require costs the drive the to frankly, And more to than preferred who other customers whose during to customers have driving less professions office. vary them

have while it’s consistent, customer margins across our in different segments by due near is extenuating the those might XX. segment So, to term circumstances, margin target we

David Motemaden

like big it. just of mix? chip Got as gears the the look severity you severity severity combined thinking a quarter. go thinking supply wondering about costs, Thank with this just collision little you. to are it back And a severity bit. bit shortages, bit. lot didn't claims a then in Maybe coming just was up side you Property shortages, how little saw we maybe obviously little about flattish, loss damage hearing a over the about But forward increase a switching equation just

it of benders want you severity of might tailwind potentially level, mix for down. But get high of sort severity maybe everything in go, seeing more the a fender claims be of where that a expect just to somewhat macro you terms a So, could right take just and bring have your now? just environment where the that we're given at to in bit

Tricia Griffith

a that one. That to knew tough is such I wish I question. answer the

the some sense seeing losses on side, back, lines are special We that closely. especially watch it now, come we'll makes

closely. things been haven't We We the those semiconductor shortage. from watched affected yet

is severity, Some at down of we've look of little cat average terms the losses. a of had in premium a and bit, we'll our lot

into So, play all of terms those said, course of really it do states open. things plays as what then like in you it. And people into do different it it does,

and we've more travel be So, see grandpa, in the is seeing. you less volatile may than kids the will there Obviously, accidents that cause to pandemic the it because be. are up packing less highway will been congestion go grandma

closely. to things So, we been to going are those. never in to situation. watching react be we've this all And And of those we're able

So, watch work are people but understanding just other to data, office. closely with some our data that we're we in to starting the not more gleam will terms from starting UBI of when

people there some to are And occupations so, top shows quickly we creep are watch to that. going that little up that to want and often. because, We're pretty bit be have data there, people continue we on and more that of some think a some already some could we

David Motemaden

of, looks any after a that last by year, Thank maybe increase sense. just or auto, guys rate obviously did through? did that little rates not like on like percent, uncertainty little influence looks I you Because change? it that you makes And on sort a you. but caution bit hundred come have in just rates bit, of That was decreasing that guess, that point, up following any it

Tricia Griffith

what look the terms Well, we of at in we do. all trends

goal took know credits, we always and of want rate our after customers, So, channel state, apple they our we by by bites to we product, take looked was then across channel, Board and the state small looked by because we to stability. the product

different attributes of we're a and we driving so, and and states behavior. in this have increases terms the end at And in of doing severity year and We're now thing. great the frequency same different look very taking felt

data looking and we the just rest this as us, year less X% is making at we'll that So do And tweaks. things than of based see that on the unfold.

we're in in this we're then that's I the data, why, and need this channel. is set trends think, quickly saying, little bit product, to okay, so good those unfold. it's the way as up this more that really using because on data we a And So, react machine can pretty in a they

David Motemaden

Got you. it. Thank

Tricia Griffith

Thanks.

Operator

Josh Your Shanker Bank is Please ahead. next from America. go with response of

Josh Shanker

Yes, morning. taking questions. for you my good Thank

Just a clarification, please.

On seen, insured got are surge checks, that maybe have who through you Day, it you've trying a yes, XXth day or with are certainly I their Sam back biggest persistency. doesn't when along I'm related – the come the Shopping the lot April the population those the lines. stimulus coverage to right into you business, stimulus I to understand go shopping people these March discontinuous mean, obviously but just have of and means for know what May? that

Tricia Griffith

meeting Sams, Josh. actually, from back, other love And theory income and lost stimulus years We And to large earned in people eight afford grew other largely years, make that part maybe think it. I tax or people shopping we them. as margin. we Sams, that in up seven go Thanks, the constituents this their our is long government. for But Sams. when target can saw probably ago. our them that It it is presented get in or if you have the We as IR with their it couldn't insurance

be are the back lost want just the are coverage These maybe that. people in right and do to and trying game the right thing to do get the thing. exacerbated So, that and legal stimulus and

where it something see is for in but part other is yes, as predominantly whole, to and and the this continue we'll we shopping started large behavior stimulus increase So, Sams. a that industry be in will

Josh Shanker

pricing, your inflation severity Okay. might in is very, inflation is table obviously a heard rental that issues the to lumber seem of And that question. follow-up close – that up severity issues that kitchen going whatnot. prices pricing issues now, then be about lot are contribute David's heard Those are future issues to just issue In about or we've for about very rates? that car that of Progressive. and what on how sort you're We've right kind current a knows everybody related and captured

Tricia Griffith

especially minimize the and macroeconomics basis. at that all have on pay going that that place amount on rental rental. party, look the to you day say for first to a We are per I react in we our coverage, on contracts would severity on a the

So, that. feel about we good

We the and that, the also customers out their if their car, driveway. side get rental back see in you car believe on there want

really the car into at the before we So, which accident. with get back time to shape or than compress to do better try the

So, which pride we've of if we that will actual ourselves in unfold. we that lumber, the And is always affects rate start see the future will rental. that takes, piece time severity, On increases. on course that price it to of a we believe

John Sauerland

say, know, XX, over now case Josh, our until price an interesting indications rate sold Yes, the is goods coming to what as level you insurance we because be the is them I of But product XX, of a the from process cost don't should months. whatever know you truly what year home. in call forward looking

that of views and for are and lumber. as more said selecting they that and macro And is Tricia informed little goes. forward. for frequency trend are economical we little We holistic more such views, a as trends spike We're selecting but where the also specific severity, sure to a cost over long approach would taken a have price in obviously, near But term. case, not the term severity by level the going that the

Josh Shanker

the Well, and there's answers. I right. there lots digesting All appreciate of

Tricia Griffith

Josh. Thanks,

Operator

you. Thank

next Partners. is with Gary go Please ahead. from Ransom Your response Dowling &

Gary Ransom

I wanted conversion. morning. about to quoting Good and ask

place. But and the the a quote accurate side, powerful explained first I And have of see big conversion lot. price people that That you you're think, a flow by gets up risk. funnel is probably customers. is your something matching on in doing of I in the

I not, And simply whether have I'm I I'm to shopping. home, go at sitting So, maybe if I'm Robinson. stimulus or a decide going a check

a what's at quote? get being ingredients of some getting the into Just of wondering that Progressive key customer successful

Tricia Griffith

Yes, Gary.

brand. I think it a is lot our of

brand, started with is. – brand out who a is out the XX different. would It's know and solid answers They Progressive is brand I know So, XX one people awareness our of ago, we started a brand. about years ago, be reputable our years

So short shop in on that's and on and gets our when the coverage awareness our door. then of kind you're the you And short competitive list gets you prices the list. you broad

that – obviously lot we a expanding in more spent And a and lot we've brand believe were coverage. our on in we broad this again, So, XX% quarter. spending other increase

a and on how buy to you phone want if you it sitting you auto a competitive go your to customers. agent, you're try on for to Robinson you an prices. want in, our And to want easy couch or home we you you're where, and to when call make iPad, and have or to or and just So, be to your want shop your then

I important of think to course, is and and that into rate segmentation risk. our So, that understanding really goes,

John Sauerland

looking more? digital also the recognizing of And Gary, spend to And massive add, web a time value they I media, I spend where of up, digital make the decisions, is Progressive are is meaning analytical mass increasingly are what to quote. be huge that powers digital our portion but there it Where spend of that digital and people displaced that would would advertising the is use media these but less? our advertising They media. in And prospects sort because marketplaces are the can group, in auctions. do we kudos it should that on days. we we call much our of lifetime multiple should inherent real give great auction to

we there. if can you it's whole concept direct, a if shorter, longer have we So, you customer retaining more, get the spend imagine can that’s

that a in number I been we think of a has a now. So, pretty lot for that And been us are growing space that for years space. good has

to front quote person quit a as quoting important is got the not starts them you as optimize buy as in to the as that are the price. efficient we as of once process. assume. to that you top simple to the then customers And avenues quote them make multiple decide the it. that at you door, And is do to get and you get other where The to to to get thing that There might get possible can obviously continuously translate said funnel flow,

of doing analytical is And massive think there. lot impressive some people, our this a think So, skills, great data I sets. things we're I great

Tricia Griffith

the treat accident, you there talked Gary? out control there. you a a thing that only most. that question, have care. gotten us about how incident that. marks weather, we believe really We're on customer. do But they're cats service. say, need is when We're the when an claim once this bit in you off. as we the there’s lot you I I And all we we control have is would or we've always have We industry-leading Did can And high an little can't I and another a

Gary Ransom

a up Yes. it that digital of I just follow on assume on the you space? XX% to, that the to is to reasonable said lot that, is was going ad in spend based what more growth

Tricia Griffith

rate over at, look the is XX, so When on when take we the growth. years we Yes. they're it phones, of we look and people and digital, now bought XX years, buying looked the highest last when a

Gary Ransom

is, that, just of compare you both body topic of matching risk, it same of are the that the they and on more science process robust? all terms the the you're look little quoting this a just at of body kind one price as to into if science and for I just of in and have putting And Yes.

Tricia Griffith

on think side, when then more rates I accurately to where look in so. the that. that John. with out new even just we analytical and can to price or our to at continued models you mean, risk coming customer. have I'll We think, ability get excel preferred And concur buying to continue I I product

our a incredible an have in-house. buying do We of lot team. We

So, to it's us. proprietary

team an have our allowable that customers costs. below at understands or branding, in then art getting around the and and our science both We incredible

that highly teams continue both people of are we to in. invest analytical So,

Gary Ransom

you. Thank I appreciate that.

Tricia Griffith

Thanks, Gary.

Operator

Thank you.

Your to next response with Adam Please the go line Blair. Klauber of ahead. William

Adam Klauber

direct Thanks. rapidly. hire that Good that morning. doing is auto you think different economy business? clearly comparisons, is – with through – of of me. what growing again, for in particular but the that commercial the line off, guess, and growing you business called sense the And are distributed being but cars makes taken I And I digital? that Excuse out the more Commercial is in

Tricia Griffith

tractor and big were because to decided but spot own think trailer, firms truck the coverage I when went drivers their own go happened we pandemic not more by we their know rate ready, intentionally, from to up. Yes,

want closely for at when auto our priced where, that and – well. commercial shop. But the we years, side. the because and to side very we ready majority agency we we how – on on grown agency look And be many and So, our want both we've of customers to were substantially We of direct we're side. sold our the again, all

not bested in ever August of hire So, highest overall, or and only in The the auto year direct for growth year. came It normalize this this we year. then of for that's January by commercial was, commercial five-week for of last necessarily when March there auto And four- month. trucking.

ready make underlying we the when ready and this for feel the we happened, costs. great we about kind So, were trends sun the hay to are of shines, when

are careful it is high about also that because limits We coverage.

trend our selected And making a XX% so, us severity reserves. have with we very comfortable

the the at business like actually We think excited both in direct new agency. we're this more time. feel the I And we're we're on right right and about reserved. place than

Adam Klauber

Right.

early of coming year and then claims And of to is March Okay. of of years down frequency end early is of end mentioned XXXX to compared does say last follow-up to to but the in April, of XXXX? it's through compared in claims your first How March, VMT of the XX% prior you the letter, in versus but that you X% week frequency end March that up, say claims. April, frequency April my

Tricia Griffith

what's first it it compare Well, compare now. to happening and go let's –

XX% early XX% Then down caught XX%. to March went So April. X% up to Claims VMTs to it It’s were XX%. down XX% up to to has not yet. back about

recent grow, XXXX, starting would hasn't what – say, to starting features are data in through see We to compared yet. John? you just really surprising Not up XXXX caught

John Sauerland

don't Well, frequency raw provide our we numbers. so actually

a yourself. Recognize the overall now that giving exact Obviously look step to as the I'm with for. math took years do trends it you So, pandemic, not well have you're negative. trying down. frequency as been XXXX, that but XXXX sure we And lot well, at is down the frequency not and of from things only versus a pandemic that still range of the frequency, frequency sort dropping. but function generally was that data looked We to we'll we're at a for a number of XXXX area, recognized call but before of

think was do But But that negative for we're been us to offset, and it I sure it's a and offset has year. to by trends look going of et of growing. those look the lot the you're frequency rest of frequency to even long-term the wouldn't I'm cetera, would have know. reasons. forget for when through to why trying look like, like over severity, that's June, a April, May, course difficult So, what longer-term industry project to through been more and that I than is trying the for I

Adam Klauber

lot. a Thanks

Tricia Griffith

Thank you.

Operator

Thank you.

next go Benguigui Tracy ahead. Your from of response Barclays. is Please

Tracy Benguigui

Thank you.

you I that Just a are Are during a pandemic. seeing procedures possibility? trends. you thinking reopened? I'm been in loss as delayed delays medical follow-up booking IBNR about mean, the might've on anticipating economy any for claims extra that

Tricia Griffith

can claim is it in on a believe by are an influenced be and if less data or and a actually open claim, Well, it's what we injury have And PIP unfolds. what depending they well, adjusters or medical how injury more, when can as we specifically – the we come long believe see estimate that the then be cost or happened. we and again, get an will claim claim it

in saw our more but of lot not injuries in amount think I stall A surgeries think early BI. on, sort of are a importantly, and huge a not tissue surgeries treatments, I course, soft of injuries. necessarily of we there's

did of so But see a on data that worth open that up I priced see as so, of we – in. and and closure can heal And on their course, years have but even can those with should was we be lot well. that don't a own. years’ What we already

Tracy Benguigui

are Also employment? it. as your quality the for-hire the drivers in Got in is folks view, space of for what looking

Tricia Griffith

varies. that think I

very think business really watch We are I putting the about that on great we that book. our varies. closely. feel that We

we industry. an driver lot driver a of –you shortage, can it think depends changing that the auto with like the in maturity. I see just now, right can And see on overall

seen we'll closely we not price that, that rate risk make that have to but We segment. again sure to for watch that

Tracy Benguigui

Thank you.

Tricia Griffith

Tracy. Thanks,

Operator

you. Thank

Meyer Your go next response is with ahead. Shields Please KBW. from

Meyer Shields

frequency the Tricia, about past severity Thanks. how left and talked in auto you though. is I know, in reasonably predictable

how you months XX than the So, policies in are I you where that. book, that to of you hoping the do have respond to context was about talk six? could property rather

Tricia Griffith

of property cetera. structure at to the age Yes, I of going prone is right the – property, we think We're And segmentation deeper location to the look et understand now. in that's hail the we largely The in age continue a roof. space. stay, or the in

have we but the last year. into rate really I Texas. on at, on we change have we there look has that lot several more really so, solely will we catastrophes place has outcome, the that. of happened, the freely increases I even talked put been – year the a in time and that And Texas things and I think we'll about CR mean, that next in side, the been at because And variables over property and – look that property

where have may to look restrictions that? also you that We may we Do to not certain at grow. will making John or to we want want add sure believe we anything

John Sauerland

No.

the very what it's similar. that into date use call with account of think And trends trend those we to policies. durations obviously I take models a

as being now somewhere book I policy mentioned XX-month on there. agency business as and You XX our is The XX we XX% predominantly close commercial property have around well. it's think months. months And to

trend to a it's same It's So, the generally. process. out just further

Meyer Shields

to the there? we If the can environment current the the Does helpful. quickly for wrapping guess small, change BOP switch That's timeline up size commercial. of I Okay. Progressive competitive

Tricia Griffith

a BOP reassess is few system, businesses states took we'd a we or Well, XX in, a whether to want we're less to very out And many kind our we're not just Remember we small of cetera. very quickly, almost when pandemic reassess it. about we on audit, but what of rolling that rolled to think in small of very now initially base. many, micro computer excited growing We're pause, states. started, sort about out rapidly, do et go and when business, very the albeit states think employees about going we

aggressively. from rate our we're Karen mean at about we're I'll So, when questions no, know, But perspective. have what We of BOP we're a very in more excited learning. we our can this excited a on August. have on especially conference roll and to we're and feel continue at about about that to in fleet. commercial. out all VMTs And lot business I where good there's the small And where you talk outline we're

Meyer Shields

Thank great. Okay, very much. you

Operator

Please next ahead. response with Meredith UBS. go Thanks. Brian Your Instructions] from is [Operator

Brian Meredith

Yes. Thanks. morning, Good Tricia.

Tricia Griffith

Brian. Hi,

Brian Meredith

the how How decline downturn? Quick you. [indiscernible] or a or premium policy Could of rising for customers the the changes had here rate average the that coverage much been is in much per X% we minus is versus economic just is little written that question bit implementing deductibles here. rate-driven, during

Tricia Griffith

in but reduction premium. the were in rates. say changes We I behind of reduction the majority would be reason our sometimes payments, average written say I coverages. customers primary not would delaying call would our rates huge had is are – rate they several in it

Brian Meredith

I'm helpful. Great. curious. And question, my just second then That's

time we I and carry well So, policies premiums within a perhaps call it over card, a that rising them offset Does here that some potential protection an we'll your as insurance inflation severity? of inflation in to policies inflation. if both gradually auto account know your that do of have that your homeowners for lot kind as in raise see

Tricia Griffith

things hadn't placed That We the every that actually auto place for inflation side. have on some factor month years. we into for a take

John Sauerland

certain the by a predominantly driven the inflation. transpires generally is in to Yes, home cost that home replacement degree

into would like your we replacement at your how be something costs lumber So, renewal. assess factored would

factors. monthly side, we have rating auto call built the what we On in

So, time. this Trend over an that is positive. speaking is in generally losses acknowledgement just average

modest states. a equal that in premiums all we does we in payment positive impact bake month average And on help into in It algorithm don't auto. increases in every so ensure, see those not states. trend premium. have so, else We all pricing It's those huge in average that a the

Brian Meredith

Great. Thank you. it. I appreciate

Operator

Thank you.

with Shanker response next is Please America. of Josh from Bank Your go ahead.

Josh Shanker

in whatnot, Thank property growth back the talk you It appreciate in question sequential that I it's XXXX. to growth accelerating property a one taking relates your of your the related general? in compared there's and the I people we there's little desire does seem policy new than years count right slowed to maybe convert more for in it. down me. for and those How noticed two now. I last Can in about the going March but XXXX, both appetite? also Robinson property was out to from was where to that cat to Progressive a I have year funnel guess appetite How whatnot, opening amount up aggregation starts it to and and now is ago? it it moving risks. that and best a are know since housing for of warning lot September and might

Tricia Griffith

it on third-party [indiscernible] Explorer side of with on HomeQuote Progressive HQX, having our think, we companies not so the we've lot and one, affiliated I other a property a with. Yes, direct invested depends couple work things,

easy it have really auto and continue to buy do buy have those So, that combine we've and online. and able companies to makes to continued of to be home it a more button, which more the

On little now. platinum platinum our X,XXX the agency a side, we've agents agents increased bit have over

us. make divide to want We ability more side. property again, So the to money on

in – to want those go thing of a of the to of states XX were we do now. out have lot the do, area, we And And years, we're density in country. across and segmentation. been, grow Florida, so, in we right terms and Texas, I also that think to We had we we for but continue want

is appetite that But we to want as our other our of is we as want margins. So, our target can. to part we course make fast profit of grow

bit accurate. x increasing And segmentation I and at those said, at the we little look we to are understand underlying trying understand believe a we So, is where deeply. days, to cat look as we rates to more try price

big want many money there. grow reasons need to one the why grow so to of we've that on make Robinson product. made we So, want that's to We we investments but

Josh Shanker

how the by whether or did Can you sense you us policies property bundled HomeQuote are about Explorer Progressive auto of have policy? a that policy give a any percentage

Tricia Griffith

Explorer. HomeQuote the Yes,

So, that say take we're XX%. overall I about in would Robinsons

Josh Shanker

XX% at of your point. auto market shares drop this

Tricia Griffith

Yes.

Josh Shanker

Okay, you. Thank great.

Operator

Thank next Evercore David with you. from Motemaden is response And ISI.

David Motemaden

from Tricia, me. talk for road I thanks offering just the another Hi, and just in detail to wanted a about taking maybe that just see stands. test question where more bit

traction – scale plans roll you and out has If a to there? how on been broader it much have how

Tricia Griffith

with test. a – What we've road we the bit challenged on continue little to been economics be

on some metrics come. So, redefining that of and I to we're would stay more the

develop we make We work. the there, need continue to but to economics

David Motemaden

to about you flush what little work what Maybe And that it hard economics? there? see sticking economics for the it it. like, the point Got the is that that a bit is out make

Tricia Griffith

There's rather outline working, us exactly different I'd several working is and soon. hopefully be one have what's that'll things.

David Motemaden

Thank That's you. Okay. fair.

Tricia Griffith

you. Thank

Operator

Thank you.

next response from ahead. Your Fargo. is go Please Greenspan Elyse with Wells

Elyse Greenspan

you're from My thanks. give Hi, to I couple I me think obviously but here, since you guys a you kind of, in there, from about closes question, shied first more just the except so away M&A unique brought Progressive waiting often as us Protective just circumstances. of and obviously announced M&A know that acquisition additional recognize, details

road? current of your transactions just down So, that kind the you us pursue view provide can and might anything you to cause additional

Tricia Griffith

limited cumulative. number to Andrew our fit us kind and can strategy have our under hard hard landscape that and done, that's we we've culture. with think I have be great department specifically, great see are why us group. products, have for because culture And searches and felt of We it's the a things. development always is Quigg It like corporate of that Acquisitions

talked thank agency gives channel little the bundle to about that I've and have didn't talk the that to about you ability in So, We acquisition. the transaction customers about bit Protective us ASI more closes. We that. allowing a few talked a for times us after the

customers, always help at it. that to bring that kind it Progressive will I we us will how always what get can't we're that's grow does I And or faster. And to of access kind ability look the to look So, us organically, acquisitions. want see at market to doesn't how of to to thinking of is able look, get or to give market I I the technology, but access faster be again,

Elyse Greenspan

letter the product Right. then was wondering then but driving shorter your you've that other on, and are relative in Relief question that bit But switching was it some just early, And observation? Apron within of noticed quarter my last and there you second Q. like like I Snapshot seems in little color a had that observations products there just like to of it's any kind period still general mentioned

Tricia Griffith

Yes.

to could So, to XX those we out and XX we, about that haven't XX so days. and in customers like said XX,XXX about again, have sent states of unfold. communications so enrolled you Elyse, We million I

that far if point X% does lives differs. fact the driving allow called people that pretty still program. and did proud small have feel reduce it their we to or about So And very reached X,XXX behavior us the percentage of driving XX-day a because have we to that they're of rates their join

but customers roll small a out, the all before has time some actually have program. Snapshot percentage the relatively still we again, So joined

Elyse Greenspan

Is or is monitor right might obviously a had a the the idea it pandemic option available time idea tied an on the indefinitely, kind to driving of keep to and was like, But period certain period. the shorter of to this this keep behavior? that’s normally impact there have driving for going

Tricia Griffith

Yes.

July in have place till We this year. program this

Elyse Greenspan

color. Okay. Thanks. the I appreciate

Tricia Griffith

Elyse. Thanks,

Doug Constantine

time. We've scheduled exhausted our

Tamara, over event. you for closing I'll the our to concludes call hand back scripts. that So

Operator

for be of Corporation’ the will investor event That investor concludes of first Progressive's the quarter available year. Progressive relations Information the the the about on next section event. website replay

now may You disconnect.

The Progressive Corporation (PGR) 5 May 212021 Q1 Earnings call transcript